What Factors Affect Business Gas Prices?

Among other services, Smarter Business helps businesses around the UK save on business gas and electricity costs. By thoroughly reviewing your existing energy contracts, we can help you find ways to cut back on costs, leaving you more cash flow to spend on things that matter more to your business.

Business gas and electric costs are part of life for any business. In essence, this expense is based on the amount of energy your business consumes within any given time period. Of course, as a business owner, you knew that – and yet most businesses fail year after year to thoroughly review what they are spending on utilities with a view to find potential savings. This process could potentially save you thousands of pounds which could more productively be applied elsewhere within your business.

To appreciate how your business can save on its gas bills, it’s important to understand how the cost is computed, how it differs from electricity energy prices, and how you can reduce your usage and the costs that come with it.

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How Business Gas Rates are Computed

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Business gas rates are normally lower than the rates charged for domestic users. Most businesses, however, pay a higher rate of VAT (20% compared to 5%). And the final price you pay, of course, depends on the size of the business and its monthly consumption of gas.

Gas can be charged for in three different ways:

Fixed rate

Your prices are fixed for the entire length of the contract. Most contracts run for a year, but if you want certainty of the rate you pay for a longer period, three-year contracts are also available.

With a fixed rate agreement, provided your energy use remains relatively consistent, your gas bill will be predictable month-on-month for the duration of the contract. This can be beneficial if you sign up when gas prices are low because even if rates rise, you’ll still pay the lower price as long as you’re within the contract period.

The downside to this, of course, is that you won’t save anything if rates drop below the price agreed under the contract. You may also incur additional fees if you decide to end your contract early, which often precludes switching to a cheaper business gas supplier for the set period.

Variable rate

With a variable rate contract, the price you pay goes up and down depending on market conditions, so there are months when your business gas bill could be lower. However, this also means that there will be months when your gas bill will be higher than usual.

There are no exit fees if you want to switch to a different contract or a cheaper supplier. If you’ve been on a fixed rate contract that’s come to the end of its term, you’ll usually find that you’re automatically switched to a variable-rate plan.

Deemed rates

Deemed rates are applied when a business is between deals and has not yet finalised negotiations on a new contract. This is by far the most expensive rate you could pay. It also rolls over every 28 days, so it’s important to finalise a more advantageous business energy deal as soon as possible if you’re paying the deemed rate to avoid unnecessary costs.

Deemed rates do, however, ensure that your business remains operational while you’re still in the process of trying to change business gas suppliers, instead of having your power cut off while a new deal is being put into place.

If, as most businesses do, you use both gas and electricity, you can choose to use one supplier for both or two separate ones. Dual fuel packages that are popular with domestic customers aren’t usually available to businesses, but there can still be benefits to using the same supplier for both.

If a single energy company supplies both your gas and electricity, this can make your energy issues fairly straightforward, knowing that you’ll be dealing with a single company. However, it can also restrict you from working with a company that offers lower rates for either gas or electricity.

Having a separate, single contract for each form of energy means you can find the providers that are offering the best rates for each and maximise your savings in both areas.

Smarter Business can assess your company’s requirements, usage, and future plans to help you choose the best way to save on energy costs without sacrificing efficiency.

how to find the best business gas supplier

How a Business Energy Audit Can Help Your Business

Smarter Business helps businesses assess their energy requirements and find the right rates and contracts to sign up for in order to reduce overhead costs and start diverting the savings made into other areas of the business. Our business energy audit service will inform and guide you towards securing the best gas rates and energy contracts to benefit your business.

Call us now on 01444 220060 and let us help you find the best commercial gas packages in your area.

Because of the sheer variety of choices open to you when trying to finding the best business gas prices, it’s important to make decisions armed with the right information. This is where a business energy audit can help.

A business energy audit thoroughly reviews your current usage and spending to enable you to find the most cost-effective options. It also looks at possible practices or policies you can implement to help your business become more energy efficient. An audit also ensures that your business remains compliant with all energy policies in your region.

What does a business energy audit involve?

  • Tariff or rate reviews on your business’s gas, electric, and water contracts
  • Analysis of your business energy consumption
  • Recommendations on how your business can save energy
  • Advice on how you can maximise the benefits of your energy contract(s)

Remember that an energy audit doesn’t only allow you to save on your overall business costs. It also gives you the chance to shift your focus towards building a business that takes its moral and legal responsibilities seriously.

FREQUENTLY ASKED QUESTIONS

Who are the biggest UK energy suppliers?

The six top energy suppliers in the UK are British Gas, Scottish Power, npower, E.ON, EDF Energy, and the SSE. As the most prominent business gas and electricity providers on the market, these have a combined market share of 70% for electricity supply and 69% for gas supply across the country. Smaller, newer suppliers often offer more competitive energy rates.

What are the advantages of gas energy?

  • Natural gas burns cleaner than other fossil fuels, making it eco-friendly. It is also safer and easier to store, and cheaper.
  • You can always rely on it, unlike electricity that may not be available during times of a natural disaster.
  • It is abundant and can be easily transported.

What does an energy consultant do?

An energy consultant service includes an analysis of utility bills, working practices, and equipment and machinery use with a view to limiting energy waste and cost.

Energy consultants can help businesses negotiate lower business gas quotes with energy suppliers and suggest changes to working to reduce energy use. They may also recommend introduction of lower-cost materials with more efficient energy features.

How much is gas per kWh?

The average is around £3.80. Business gas prices per kWh vary because the unit rate depends on the energy price plan you choose and where you live. This rate also fluctuates depending on the amount of gas you utilise. However, you will also be charged a fixed amount each day for the standing charge.

What is the most useful source of energy?

Thirty-nine per cent of the global energy consumption is attributable to oil, which has historically been the most used energy source worldwide. It can be refined into various fuel products, including gasoline, kerosene, liquefied petroleum gas, distillates like diesel and jet fuels, and residuals like industrial and electricity fuels. These are all used in various applications.

Why natural gas is so cheap?

Natural gas is abundant – there are 6,846 trillion cubic feet of reserves globally. According to gas energy experts, its price is lower because supply significantly exceeds demand. This is due to new discoveries of resources and improvements in extraction methods, resulting in production and the amount in storage to rise.

Ways To Save Energy In Your Business

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Include staff in attempts to save energy. They’re more likely to engage positively if they feel involved.
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Identify and understand what’s using energy in your business to inform what you can do to reduce that usage.
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Invest in energy-efficient and motion-sensitive lighting and reduce the unnecessary usage of office equipment.
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Hire a corporate energy firm to carry out an energy audit and suggest ways to minimise your usage.

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Align energy-saving changes in practices to the business’ needs to ensure they’re sustainable.

Tips For Energy Savings for Buildings

  1. Consider installing cavity wall insulation, as around 33% of heating is lost through your walls. Insulate any hot water tanks.
  2. Opt for energy-saving light bulbs and more efficient boilers.
  3. Use a thermostat, and lower it by at least 1 degree.
  4. Avoid unnecessary usage of office equipment. 
  5. Fix dripping taps right away.
  6. Draught-proof your premises. 
  7. Use an electricity monitor to become more aware of your usage.
  8. Switch to a gas energy firm with lower rates. 
how much can you save on business gas

Reasons To Hire An Energy Consultant For Your Business

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Managing energy usage and costs is time-consuming. A consultant can free up staff time, allowing that resource to be deployed elsewhere.
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Having researched your current tariffs and energy usage, they can source a business gas online quote to find the best energy contract(s) for your business.
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They can suggest immediate and longer-term ways to reduce your energy usage, offset your carbon footprint, and so on.
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They can deal with bill validation and query resolution on your behalf if you think you’re paying more than you should be.
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If your business is expanding or contracting, they can handle infrastructure changes with ease.
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All You Need To Know About Business Energy When Starting A Business

  • Choose between a fixed tariff contract (where there is an agreed rate) and a variable tariff contract (where you pay depending on the current market price).
  • Energy from renewable resources is available for businesses. 
  • Business gas and electricity can be sourced from the same firm, but you’re unlikely to get dual fuel tariffs. Using different suppliers can be cheaper. 
  • Current business gas prices in the UK are cheaper than domestic energy, but the VAT rate may be higher and you must also pay the Climate Change Levy.
  • Pay by monthly direct debit to get a discount.
  • If you have more than one site, opt for a firm that offers multi-site energy contracts.
  • Beware expensive out-of-contract prices and source the best supplier(s) as your existing contract is coming to its end. 
what to know when starting a business

What An Energy Audit Entails

If you’re interested in how your business could save money on energy bills by switching from your existing gas utility company or implementing an energy audit, contact the team at Smarter Business today.

Call us now on 01444 220060 and let us help you find the best commercial gas packages in your area.

All large businesses in the UK are required by law to carry out an audit of their energy usage, but the practice can also help smaller businesses save money and operate more efficiently too.

An audit will look at the energy the business consumes and how efficient its premises are. Recommendations from the audit will include changes to working practices and habits that can reduce energy waste; and solutions that can be introduced to improve the efficiency of the building.

Many of the recommendations will cost little or nothing – the switch to energy-efficient light bulbs, for instance, won’t cost much but these bulbs use between 25% and 80% less energy and last 3 to 25 times longer.

As well as saving money, an energy audit also improves your company’s green credentials.